PAC draft: Chidambaram hits back at Joshi

Home Minister P Chidambaram on Friday attacked Public Accounts Committee Chairman Murli Manohar Joshi saying his draft report on his role in 2G spectrum allocation was a "gross distortion" which "deliberately and mischievously" omitted his suggestions on the issue.

In a statement, he said that his note to Prime Minister Manmohan Singh on January 2008 did not deal with the entry fee for 2G spectrum allocation but only usage charges and even a "person with average intelligence would have noticed that".

"Mr M M Joshi's draft report was a gross distortion of the note dated January 15, 2008, and mischievously commented I had 'pleaded with the Prime Minister to treat the matter as closed'.

"The draft report did not say what the 'matter' was. The draft report also deliberately and mischievously omitted the suggestion regarding charging the licencees prospectively. I am constrained to observe once again that even a person with average intelligence would have noticed that the note did not deal with entry fee at all; in fact, it did say so," the Minister said in a statement.

Asked at a press conference whether Joshi was a person below average intelligence, he replied with a tinge of sarcasm that he was referring to himself. "I did not say that. I am talking about persons like me with average intelligence will know. I was referring to myself," the minister said.

Asked to respond about Bharatiya Janata Party leader Yashwant Sinha's accusation of his "direct complicity" in the 2G controversy, he said "why should I respond."

Chidambaram was hitting back at Joshi for the critical remarks in the draft report which said that the Committee was shocked and dismayed to note that the finance minister in his note had acknowledged that Spectrum is a scarce resource but made a unique and condescending suggestion that the matter be treated close.

The committee viewed it as most unfortunate that the finance minister, the guardian of public exchequer and entrusted with principal task of mobilisation of resources, pleaded for treating the matter as closed instead of initiating stringent and swift actions against those responsible for whooping losses to the exchequer.

Chidambaram maintained that his note dealt with spectrum usage charges alone and suggested three measures for raising revenue, including a measure to raise additional revenues from licences who held spectrum over and above the start-up spectrum by charging, prospectively the price discovered in the auction.

Chidambaram said his note made the general point which was the constant view of the finance ministry and from which position he had never wavered.

His position was that spectrum was a scarce resource and that its price should be based on its scarcity value and efficiency value. The most transparent method of allocating spectrum would be through auction which will face the least legal challenge.

The Home Minister said that his note did not deal with the need, if any, to revise the entry fee or the rate of revenue share. It dealt with spectrum charges for 2G spectrum.

He recalled the note said that the price for additional spectrum should be discovered through an auction and once such price was discovered, additional spectrum should be allocated to all bidders at that price.

Another point made was if a licencee sold his license including the spectrum, it should be stipulated that the licencee should share a part of the premium or profit with the Government.

Chidambaram's recommendation had also noted that some licencees already held spectrum over and above the start-up spectrum and suggested that in such cases, payments made in the past for additional spectrum may be treated as charges for the past period.

The past may be treated as closed but prospectively such licencees should pay for the additional spectrum that he holds over and above the start-up spectrum at the price discovered in the auction.